World Economy

Oman Credit Rating Cut

Oman Credit Rating CutOman Credit Rating Cut

Oman, the poorest Persian Gulf Arab country on the basis of economic output per person, was cut for the first time by Moody’s Investors Service, which cited the negative impact of lower oil prices on government finances, economic performance and balance-of-payments, Bloomberg reported. Oman’s credit rating was reduced by two levels to A3 and placed on review for a further downgrade. It’s Moody’s first downgrade of the nation since issuing its initial rating in 1999. That puts it on par with Mexico and Malaysia. Moody’s said its review of Oman for another cut reflects “uncertainty over the pace and effectiveness of the government’s policy response to challenges.” The decision is the latest in a series of ratings cuts that has hit the (Persian) Gulf Cooperation Council members, which collectively produce about a quarter of the world’s oil, as crude prices struggle to rebound from the lowest levels in 12 years. The International Monetary Fund projected Oman’s budget deficit would spike to almost 18% for the year that ended in December, second only to Saudi Arabia.